C u r r e n t s t r a t e g i e s t o r e f o r m h e a l t h c a r e rely on encouraging consumers to make informed choices in order to help discipline the market. When consumers are informed about the relative cost and quality of health plans, it is assumed that, faced with the collective effect of their educated choices, plans and providers will compete on both cost and quality. According to this view, informed consumers will reward those providing the highest quality of care at the lowest price and will make choices that are more satisfying and more appropriate to their individual needs.When there is no public disclosure of quality information, plans may compete on cost alone. Competition based solely on cost may give plans and providers a strong incentive to skimp on the care they provide to their enrolled populations. Therefore, it is critical that quality information be used in choosing health plans.The dissemination of quality information may lead not only to the selection of high-performing health plans; it may also raise awareness of quality issues and broaden consumer concepts of quality. Performance measures reveal what health plans should be doing for members and what constitutes good care. Thus, information about quality could even-

This study assesses the relationship between the salience of quality information and how well it is understood by consumers. The analysis is based on survey data and content analysis from focus-group data (104 participants). The findings show that poorly understood indicators are viewed as not useful. Consumers often do not understand quality information because they do not understand the current health care context. All of this suggests that salience alone is not sufficient to determine which indicators should be included in report cards.T HE HEALTH CARE SECTOR is changing rapidly, and those changes have profound implications for consumers. Because an increasing percentage of the population is entering managed care, choice of plans may be more consequential than ever before. In particular, managed care offers new incentives to encourage providers to limit care and do less for patients. Quality information and informed consumer choice could be key counterbalances to these incentives. The assumption is that the collective effect of consumer choices will exert market-style constraints on costs and give plans the incentive to continuously improve care. Thus, the expectation is that consumers' ability to compare and judge competing health plans using plan performance data will play a crucial role in reforming health care. 1Because the public has not had access to comparative information on quality, it is not known whether consumers will use this information. Consumers' criteria for choosing health plans have been relatively simple.2 The degree to which consumers will expand these criteria to include quality information in selecting health plans is largely unknown.Despite minimal evidence about their effects on consumer behav-

This DataWatch assesses Medicare beneficiaries' understanding of the differences between their managed care and fee-for-service Medicare options. A telephone survey was used to evaluate knowledge levels among 1,673 beneficiaries residing in five Medicare markets with high managed care penetration. Half of the sample were enrolled in health maintenance organizations (HMOs) and half in the traditional Medicare program. The findings show that 30 percent of beneficiaries know almost nothing about HMOs; only 11 percent have adequate knowledge to make an informed choice; and HMO enrollees have significantly lower knowledge levels of the differences between the two delivery systems. These findings have implications for educating beneficiaries about their expanded choices.

Health care report cards have emerged as a new tool to achieve better informed consumer choice and improved health plan performance. With this new emphasis on information dissemination, almost all the attention and effort has gone into the development of valid measures of quality and plan performance. Very little attention is given to the question of what consumers want for making choices or how they will use the measures for choosing health plans. This study uses afocus group methodology and content analysis to explore consumer concepts of quality and to determine how consumers view the quality-of-care indicators that are appearing in report cards. The findings show that consumers have a high interest in quality information. There is a stated preference for quality indicators that reveal how well the plans perform on preventive care and on consumer satisfaction. Asking participants to actually make a plan choice on the basis of comparative plan performance data showed that stated preferences for types of information were inconsistent with actual choices.

Significant private and public resources go into the production of various types of performance measures: from patient satisfaction with nonclinical service to clinical outcomes. While recent investigations have focused on the effect of clinical outcomes information on clinical practice, almost no work examines its effect on purchasers' decisions. This study examines how large employers use performance information, including clinical outcomes, in purchasing decisions. Representatives of thirty-three large employers that purchase for 1.8 million covered lives were interviewed in early 1997. Findings suggest that purchasers are not always aware of clinical outcomes data and that measures do not meet their decision-making needs. Further, the variety and amount of performance information to process for purchasing decisions is a barrier to effective decision making. Recommendations for supporting purchasers' use of performance information, especially clinical outcomes data, are included.